A salvage title car is one that has been declared a total loss, meaning the costs of repairing it exceed a significant portion of the vehicle’s cash value. Until it has been rebuilt and deemed safe to drive on roads, you cannot insure a salvage title car. After being adequately repaired, the vehicle will obtain a rebuilt title, and you’ll be able to purchase insurance for it.
Rebuilt VS Salvage Title
While both rebuilt and salvage titles refer to a vehicle that has sustained substantial damage, there is a key difference.
Salvage title cars are considered not worth repairing by the insurer. The scale of the damage is so large that the expenses potentially spent on putting it all together again are not justified. This usually applies if repairs make up over 60% of a vehicle’s cash value. A car can be declared a total loss due to being involved in a massive collision, being crushed, or falling victim to natural disasters or destructive weather conditions. Salvage titles are also given to stolen vehicles that are yet to be recovered. These types of vehicles are not safe to drive owing to the extent of the damage, and they are not to be sold until appropriate repairs have been made. You cannot insure a salvage title car.
Rebuilt title vehicles are previously totaled cars that have undergone required repairs, have been examined, and are considered safe to drive on public roads. Rebuilt cars have a significantly lower market value than cars with a clean market value, so they are commonly purchased as a financially favorable alternative.
There are obvious risks that go along with buying rebuilt title cars, as you never know if there is unseen damage that will make itself known when the vehicle is in operation, which is incredibly dangerous. The repairs made may not be as thorough, resulting in the eventual need for more repairs, draining your wallet and outweighing the money saved at the initial purchase.
However, you might strike gold and find a rebuilt title car that sustained only superficial damage, is safe to drive, and is worth only a fraction of the price of a clean-title car!
Even for this perfect scenario, a major difficulty arises: insuring your rebuilt title car.
Rebuilt Title Insurance
Some insurance providers don’t offer insurance for rebuilt title cars at all. Others may only provide liability coverage. Either way, your options are very limited when it comes to rebuilt title insurance. A select few companies offer full coverage (comprehensive and collision), though there are conditions that your vehicle will have to meet, and the premiums will likely skyrocket.
Getting Your Vehicle Insured: A step-by-step breakdown
- Obtain a rebuilt title.
Only this title will give a total loss vehicle the opportunity to be insured. This will either already be taken care of by the seller of the rebuilt car you are interested in, or you will have to go through the process yourself with the salvage title you have at hand. If you’re looking to purchase a salvage title car (which is in itself troublesome since you likely won’t be granted permission by your state unless you are a licensed rebuilder), bring it back to working condition and bring it back on the road (or sell it) as a rebuilt title, you’ll need to get it repaired, bring in to the DMV for inspection, and wait for the new title to be granted.
- Determine what coverage you can get
When looking for insurance for a car with a rebuilt title, you will have fewer possibilities.
Since some insurers outright refuse to cover such vehicles and there are not many options, it’s important to understand which auto insurance companies cover rebuilt titles.
With repaired cars, ascertaining whether damage discovered was preexisting, or a result of another accident poses a challenge, which adds to the reluctance of some companies to give full coverage insurance on such automobiles. As discouraging as this sounds, you may still find a provider who will grant you full coverage on your vehicle.
That being said, complete coverage is not even necessary in these cases, as you can legally drive your rebuilt title with minimum liability coverage. As you are researching your options, make sure to take note of the different premiums, as prices tend to soar for repaired cars. And there’s no point in buying a rebuilt title with the goal of saving money if you’ll end up spending more than what you saved on coverage, anyway.
Find out all the nuances of searching for insurance for your rebuilt title car, so you can better judge what solutions are better for you.
- Gather Quotes
To find the best coverage accessible, obtain and compare as many quotes as possible. Once again, because of the limited options, this is a particularly important aspect to consider for rebuilt cars.